Why do "low-priced mahogany furniture" repeatedly sway the public

Recently, Volkswagen has pointed its finger at "low-priced Burmese rosewood furniture." Many media and enterprises have come out to attack this phenomenon. They believe that this is destroying the market and disrupting the normal order of the mahogany market. It is a trap and a routine.

Why is the public reacting so much to the "low-priced Burmese rosewood furniture"? Perhaps this is not unrelated to the 2015 Dongyang mahogany furniture factory direct sales incident. In those days, some merchants used the name of Dongyang mahogany furniture manufacturer to produce the slogan “Dongyang Redwood Furniture Factory Direct Sale” and “Authentic Dongyang Redwood Furniture Direct”, and used factory direct sales as a model to publish ultra-low-price promotional advertisements in some local media. After quickly making a profit, move to the next target city. However, many of these furniture are not necessarily produced by Dongyang, and there are even material defects or quality problems that seriously deceive consumers. The short “Tongyang mahogany furniture factory direct sales” ten words quickly overdraw the trust of consumers in a regional brand and a marketing model. For a long time, the impact on the Dongyang mahogany market was very large.

How to evaluate the phenomenon that "redwood furniture only sells wood price"?

For consumers, it is definitely welcome. Who does not want to buy good furniture with the least amount of money? For a long time in the past, the high price of mahogany furniture has discouraged many consumers. Nowadays, the price is lowered, and mahogany furniture is going to the ordinary people's home. In a sense, it is a good thing.

For the mahogany enterprises, will “low-priced Burmese furniture” be like the Dongyang factory direct sales incident of the year, once again overdraw the trust of consumers in mahogany furniture? Is the low-priced Burmese furniture within the reasonable profit range of the market?

We can explore this issue from the current price of Burmese rosewood and the cost of labor.

Judging from the current supply of wood, Myanmar has begun to reduce exports of wood and wood products since 2015, under the control of the Ministry of Natural Resources and Environmental Protection. Not only that, the Myanmar Forestry Industry Association also announced that it will stop the export of wood and wood products from May 1, 2017. According to the price monitoring of the Guangdong Yuzhu timber market and the Shanghai Furen timber market, the average price of Burmese rosewood in October was 17,100 yuan/ton and 16,100 yuan/ton, respectively, with different degrees of increase year-on-year. Normally, the supply of origin has been tightened, and the price of domestic Burmese rosewood is bound to be an irreversible trend. At this time, most of the finished furniture will balance the balance of income and expenditure of the enterprise through price increases. If it is sold at a low price, does this practice violate the law of market economy value?

In addition, in terms of production costs, the actual utilization rate of a basic ton of wood is only 31% or even lower. Simply put, one ton of redwood cannot make one ton of furniture, and the loss is entirely borne by the enterprise.

So, can we reduce production costs by reducing labor costs? At present, some enterprises can achieve high productivity and reduce production costs through mass production and optimization of assembly lines and equipment. However, no matter how optimized, mahogany furniture has a long production cycle, and there are many processes such as drying, cutting, woodworking, carving, installation, scraping and painting, and it is an indisputable fact that mahogany furniture cannot be replaced by mechanical equipment. Cost is still a major part of production costs. Coupled with the cost of transporting this piece, it is a difficult thing to calculate if the mahogany company wants to sell the product through long-term low prices.

In addition, playing "low price" does not necessarily attract consumers to buy, especially when the price is lower than the average market price. For example, "Myanmar rosewood furniture sofa nine sets of more than 30,000 yuan", "20000 yuan can buy a set of Burmese rosewood furniture six sets" such "message", but let consumers question: such a low price, is there any problem?

In economics, price and value are difficult to equate. Due to the changes in the modern consumption environment and the maturity of consumption concepts, consumers tend to make multiple comparisons in the face of the goods they are preparing to purchase, and then proceed. Relatively rational choice. In the minds of modern consumers, high-priced goods may not be considered high quality, but low prices are easily considered low quality. That is to say, even if consumers agree that your mahogany furniture is of good quality and the price is very low, they may still think that you are a "low-end goods."

In today's fierce market competition environment, price is no longer the only attractive factor. Therefore, mahogany enterprises should not attempt to win by price alone, but should improve their core competitiveness, realize the value-added of brands and products, and guide consumption. The correct understanding of the value carried by the brand and products, and the definition of "reasonable price" in the sales process, the standardization of the mahogany market.